Spin Central

A Campaign Finance System Run Amok

But after one month of hearings, there's no solid evidence yet of a Chinese government plot

By R. Morris Barrett/AllPolitics

WASHINGTON (Aug. 1) -- One month after they began, the Senate's campaign fund-raising hearings may not have proved the existence of a Chinese plot to influence U.S. elections, but the probe has
turned a spotlight on some of the more tawdry aspects of big money in U.S. politics.

Tennessee Republican Fred Thompson, the chair of the 16-member Senate Governmental Affairs committee, kicked off public hearings July 8 with the startling allegation that China's government had a plan to influence U.S. elections, including the 1996 presidential election.

One month later, however, Thompson's committee has done little to advance that hypothesis, and while his Democratic colleagues reluctantly supported the chairman's contention (based on CIA briefings), the China question may be relegated to the back burner for good. The hearings are in recess for now, but are expected to resume in late August or early September.

The mysterious John Huang is still mysterious

The hearings shed little new light on the man at the controversy's epicenter: China-born former Democratic fund-raiser John Huang, whose career took him from the Indonesian Lippo Group to the Commerce Department to the Democratic National Committee.

There was some smoke, but no fire. We learned from administration officials that while Huang's ethnicity made him a high priority hire, he was considered unqualified for his Commerce job. More suspicious, Huang frequently left his Commerce Department office and walked to a nearby investment bank office to use the phone and pick up packages and faxes.

Plenty of overseas money

The hearings have demonstrated, however, that large sums of overseas money supported the coffers of both major parties.

Senators presented evidence of two wire transfers totaling $500,000 from a Japanese bank to the account of Democratic donor Yogesh Gandhi. We learned that California businessman Johnny Chung made a $50,000 donation only days after $150,000 had been wired to his bank account by the Bank of China.

A former employee of Hip Hing Holdings, a subsidiary of the Indonesian Lippo Group, confirmed that a $50,000 donation to the Democrats in 1992 had been reimbursed by the company's Djakarta headquarters.

An FBI official testified that longtime Clinton associate Charlie Trie's laundered $220,000 in donations. We learned Trie lived on money from overseas, including $905,000 from his business partner, a Chinese casino owner named Ng Lap Seng, also known as "Mr. Wu."

And we heard the reason for Mr. Wu's laundered donations from the wife of one of his employees. "Yes, he did say to buy a ticket to pass the gate," she said through an interpreter. It was a ticket to pass the gate of the White House, and it worked. "I think Mr. Wu got what he paid for," noted Sen. Robert Bennett of Utah.

What did the White House know?

Newly released White House records show Mr. Wu was inside the White House 10 times, from 1994 until just before election day last year. Once was a dinner with the president in the White House residence.

And the hearings have showed us that Trie was, quite literally, a bag man.

"It was a large bag, a shopping bag; it was heavily laden and I thought, 'Oh my God, he has a million dollars this time,'" recounted Michael Cardozo, an official at the president's legal fund. Actually, Trie only had $179,000 that time, of $639,000 in all offered by Trie and rejected by the Clinton legal expenses trust.

We learned Trie got $100,000 from a Thai company that employed business consultant Pauline Kanchanalak. What was that about? She, like Trie, is out of the country and refusing to testify.

And why didn't First Lady Hillary Rodham Clinton or White House Deputy Chief of Staff Harold Ickes warn the Democratic National Committee about Trie, once they learned Trie's money was too hot for the legal trust to handle?

Contrary to what some White House spinmeisters might say, these are new revelations, and for the Clinton White House, they're ugly facts.

The GOP's overseas money

This month's hearings also brought into the spotlight how Republicans secured $2.1 million in Hong Kong funds to support a Republican think tank, which the IRS later ruled too political to be tax-exempt.

At issue was the National Policy Forum, a GOP think tank chaired by Haley Barbour, who also was chair of the Republican National Committee. A former president of the forum told senators he resigned from the forum because he felt the separation between the RNC and the forum, set up as a non-profit 501-C(4) organization, had become a "fiction."

The closeness of the two groups made it troubling that a $2.1 million loan guarantee from a Hong Kong businessman, Ambrous Young, had been secured in October 1994 to help the forum repay a $1.6 million debt to the RNC, just in time for the congressional elections when the GOP took control of the House and Senate.

Barbour's defiant testimony that he learned just this year the exact source of the funds was undermined considerably by three Republicans who helped broker the loan. They testified they told Barbour in the fall of 1994 that the $2.1 million loan guarantee was coming from Hong Kong funds.

And former RNC chairman Richard Richards, the lobbyist who represented Hong Kong businessman Young in the loan, said Barbour told him the funds were needed to help win 60 congressional seats to regain control of Congress.

Whether any laws had been broken in the byzantine series of transactions wasn't made clear by the hearings, but they did seem to establish, as the committee's ranking Democrat John Glenn pointed out, that foreign funds had had an effect congressional elections.

The committee gets its act together

After its stormy and partisan beginnings, Thompson's committee has appeared to be coming together as well. To be sure, Republicans seem to want to use the exercise to beat up on the White House, while Democrats, with few exceptions, have generally acted like administration defense attorneys.

But faced with an uncooperative Justice Department, committee members joined together in strong bipartisan votes to grant immunity to low-level participants in the now-infamous April 1996 Hsi Lai Buddhist temple fund-raiser, attended by Vice President Al Gore.

And after the administration's belated delivery of documents showing Mr. Wu's White House visits, the committee quickly and unanimously agreed to subpoena the White House for documents.

A dearth of TV coverage

Lack of live, gavel-to-gavel television coverage and the general disinterest of much of the print media have certainly dampened the impact of Thompson's hearings. Still, the committee has showed it can produce, albeit slowly, some compelling revelations.